A divided Federal Communications Commission approved a new TV broadcast standard that promises better pictures and interactive services while posing costs for consumers and letting broadcasters harvest data for customized ad pitches.
The agency, on a 3-2 party-line vote, said broadcasters may voluntarily start using so-called Next Gen TV, a service endorsed by companies including Sinclair Broadcast Group Inc. and Nexstar Media Group Inc.
“Next Gen TV has the potential to bring a wide range of benefits” including TV on smartphones, immersive audio and improved emergency alerts, said FCC Chairman Ajit Pai, a Republican. He said “naysayers” stoke “false fears” about needing new equipment to receive the signals, and emphasized that consumers won’t be required to buy gear.
However, FCC Commissioner Jessica Rosenworcel, a Democrat, said consumers who rely on antennas will need to buy new TVs to receive Next Gen TV, and cable customers could be asked to pay for both the new signal and the current format as broadcasters charge pay-TV providers for the transmissions.
“It’s a tax on every household with a television,” she said.
The rules passed Thursday would allow — and not require — stations to use the new standard. Under the new standard, TV stations will be transmitting in a different format than they do now.
The agency Thursday also loosened restrictions on owning multiple TV stations in a local market — a long-sought goal of broadcasters.
Broadcasters using Next Gen TV need to keep sending today’s signals, and to offer the same programming on both streams for five years. After that, TV stations would be free to shift popular shows to the Next Gen stream only — possibly stranding older TV sets with lesser programming. Cable providers have said they will need to buy new equipment to accommodate the new signals.
Advocates had criticized the agency for not considering whether there should be privacy safeguards for the new technology. Language about privacy was added to the FCC’s order shortly before the vote, said Democratic FCC Commissioner Mignon Clyburn, adding that she feared consumers would be left unaware “that this is something they need to think about.”
For broadcasters, so-called Next Gen TV represents an advance into the digital world that for decades has been siphoning viewers away to the likes of Facebook Inc., Netflix Inc., Google’s YouTube and Amazon.com Inc.’s Prime video service.
Data collected via Next Gen TV can help broadcasters craft ads, much as cable providers use data from set-top boxes, and websites rely on browsing history to target ads.
The Maryland-based broadcaster also holds potentially lucrative patents on the technology and is still assessing the revenue. Cable providers, TV manufacturers and broadcasters using the system may have to pay Sinclair royalties.